Stocks Charge Back; Dow Spurts 26.94

NEW YORK — The stock market bounced back from the declines of the past two sessions with a sharp rally Thursday.

Trading was relatively quiet on the eve of the three-day Independence Day weekend.

The Dow Jones average of 30 industrials, which had fallen 37.15 Tuesday and Wednesday, climbed 26.94 to 2,436.70. The average closed the week with a net loss of 0.16.

Volume on the New York Stock Exchange came to 154.93 million shares, against 157.04 million on Wednesday.

Analysts said buyers were encouraged by strength in the dollar in foreign exchange and by an accompanying decline in open-market interest rates.

E-II Holdings led the active list, trading at 15 on volume of more than 4.2 million shares. The company, a group of businesses formerly owned by Beatrice Cos., went public with an offering of 28 million shares at 15.

Gainers among blue chips included Union Carbide, up 1 3/4 at 30 3/8.

Bond prices, meanwhile, rose in quiet pre-holiday trading.

The Treasury’s 30-year issue rose 15/32 point, or nearly $5 per $1,000 face amount, after climbing point on Wednesday. Its yield fell to 8.43% from 8.47%.

Corporate and municipal issues also rose.

In the secondary market for Treasury bonds, prices of short-term governments ranged 1/32 point to 3/16 point higher, intermediate maturities were up between 7/32 point and 13/32 point, and 20-year issues were up 11/16 point.

In corporate trading, industrials and utilities rose 3/8 point. Among tax-exempt municipal bonds, general obligations rose 1 1/2 points and revenue bonds were up 7/8 point. Trading was moderate.

Yields on three-month Treasury bills were up 5 basis points to 5.68%. A basis point is one-hundredth of a percentage point. Six-month bills were unchanged at 5.78%, and one-year bills were up 3 basis points at 6.23%.

The federal funds rate, the interest on overnight loans between banks, traded at 6.6875%, down from 6.875% late Wednesday.